The energy sector has gained momentum lately with positive fundamentals building up in the space, pushing oil price higher. Notably, U.S. crude hit $58.03 per barrel, its highest price in six weeks.

The trade talks between the two world superpowers are expected to resume in early October and ease global slowdown concerns, which in turn will drive demand for oil. Bouts of stronger-than-expected data from China and stimulus package provided some relief to oil markets. Notably, China is the world's second-largest oil consumer and the largest importer. Further, Saudi Arabia’s new energy minister’s commitment to production cuts supported the oil rally.

Given the rebounding fundamentals, many energy ETFs have generated handsome returns over the past week. Below we have highlighted them:

VanEck Vectors Oil Services ETF (OIH - Free Report)

This fund tracks the MVIS U.S. Listed Oil Services 25 Index, which offers exposure to the companies involved in oil services to the upstream oil sector, including oil equipment, oil services or oil drilling.

Zacks Rank: #5 (Strong Sell)
AUM: $617.4 million
Expense Ratio: 0.35%
1-Week Return: 13%

SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report)

This fund tracks the S&P Oil & Gas Equipment & Services Select Industry Index, which measures the performance of the companies engaged in the oil and gas equipment and services industry.

Zacks Rank: #5
AUM: $138.2 million
Expense Ratio: 0.35%
1-Week Return: 12.4%

iShares U.S. Oil Equipment & Services ETF (IEZ - Free Report)

This ETF offers exposure to U.S. companies that provide equipment and services for oil exploration and extraction by tracking the Dow Jones U.S. Select Oil Equipment & Services Index.

Zacks Rank: #5
AUM: $88.8 million
Expense Ratio: 0.42%
1-Week Return: 11.2%

Invesco Dynamic Oil & Gas Services ETF (PXJ - Free Report)

This product follows the Dynamic Oil Services Intellidex Index, which thoroughly evaluates companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action, and value.

Zacks Rank: #5
AUM: $12.3 million
Expense Ratio: 0.63%
1-Week Return: 10.7%

Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report)

This product follows the Dynamic Energy Exploration & Production Intellidex Index, which thoroughly evaluates companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action, and value.

Zacks Rank: #4 (Sell)
AUM: $28.8 million
Expense Ratio: 0.65%
1-Week Return: 9.9%

Will the Rally Continue?

The rise in oil price seems to be short-lived. This is especially true as OPEC oil production rose for the first time this year in August buoyed by Nigeria and Saudi Arabia, which collectively raised production by 200,000 barrels per day to 29.99 million a day. Oil exports also rose to a four-month high.

According to the International Energy Agency, global oil demand outlook is somber amid growing signs of an economic slowdown, which lowered consumption growth during the first five months of this year to the weakest in a decade. The agency cuts global oil demand growth outlook by 100,000 barrels per day for 2019 and 50,000 barrels per day for 2020.

Additionally, ongoing U.S.-China trade war and President Trump’s declaration to be even more stringent regarding Beijing if he wins a second term in office will continue to drag oil price lower. Moreover, recession fears, as indicated by the bond market, will keep hurting demand. Demand is playing a crucial role currently even though supply conditions are still tight, given the declines in Venezuela, Iran, and potentially Libya, and the OPEC output cut deal.